Here is the other thing that I will throw out there. I know that over a year ago SE was a very big proponent of a reverse split that would put the company's share structure around the 30 to 40 million outstanding mark. I remember him saying that the company needs to become investment grade and that it needed to become the darling of the investment community. It needs to have a solid base, low overhead, a fantastic resource base in multiple plays and the ability to raise capital on many different fronts.
You are off! Just crunch the numbers! We know the average boe out put averages about 150 per day. WC said that these wells use total about 350k-500k barrels in the life time.
I would calculate it base on PE per share!
624 well*150 boe per well per day* 365 days*0.10* $70 per boe=$236 million in revenue each year for the company.
Divide the net profit lets say $200 million by the total Outstanding Share Count of 340 million.
200/340 equals $0.58 per share earnings for the PE. Multiple this by 20 which gives a share price of $11.20 per share. This does not count the equity of the hard asset of an extra $2-3 million per well for future recorded revenue over the remaining 7-10 years which would add an additional $3-6 per share in equity.
A simpler way to think about it is a well at 10% Superior ownership averaging150 barrels of oil at $70 per barrel brings in about 400k in revenue for the company per year. So if you had 624 wells times $0.4 million per well equals 249 million per year in revenue give or take.
Unless my numbers are wrong and these wells are not that high of production. Even if you used 100 barrels of production per day its still a good Chuck of revenue w a $0.25 million per year per well still adds up to 150 million in revenue give or take.
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